Transcript of "11.telecommunications reform and effects of competition on availability, quality and cost of services in nigeria"
Public Policy and Administration Research www.iiste.orgISSN 2224-5731(Paper) ISSN 2225-0972(Online)Vol.1, No.3, 2011 Telecommunications Reform and Effects of Competition on Availability, Quality and Cost of Services in Nigeria Hassan, Afees Olumide Department of Political Science and Public Administration Fountain University, P.M.B. 4491 Osogbo, Nigeria Tel: +2348052214446 E-mail: email@example.comAbstractThe inefficiency and ineffectiveness that characterized the Nigerian telecommunications sector underthe Nigerian Telecommunications Ltd (NITEL) monopoly, among other factors, informed thegovernment reform policy in the sector. The reform, which opened up the market to local and foreignprivate operators, injected competition into the telecom market. The study, using trend analysis,examined the effects of the competition on availability, quality and cost of telecommunicationsservices in Nigeria in 10 years of the reform (2001 – 2010). The study found that: teledensityincreased from 0.45 to 58.52 implying a high telephone penetration; there was an increase in range ofservices but the quality of which desired much improvement; while cost of telephone connection fellby as much as 99%, tariffs only fell by 24%. The study concluded that more regulatory measures andprovision of certain network infrastructure by the Nigerian Communications Commission (NCC) areneeded to eliminate perceived dominance, enhance competition, improve service quality and as wellbring down tariffs.Key words: Telecommunications, Reform, Competition, Monopoly, Policy1. IntroductionAn assessment of performance of State Owned Enterprises (SOEs) in Nigeria reveals a glaring displayof failures. Most public enterprises in the country are characterised by gross inefficiency andineffectiveness. The poor performance of the public enterprises is so pronounced that some havebecome moribund, while others in operation constitute a serious drain on the government revenue. Inthe words of Idigo (2003), an assessment of the various enterprises, corporations and parastatals of thegovernment at various levels reveals an embarrassingly poor and woeful performance. According tohim, in all the sectors, ranging from energy, power, aviation, maritime, rail transportation, steel,telecommunications and postal services to all government enterprises including agriculture, mining,industrial manufacturing, construction etc, the performance of government companies have been talesof woes.In the area of telecommunications, it was a serious case of inefficiency. Prior to the period ofderegulation, the country had only about 400,000 connected telephone lines and 25,000 analoguemobile lines. Total teledensity stood at about 0.4 lines per 100 inhabitants (Ndukwe, 2003). Putdifferently, the teledensity was about 250 inhabitants to 1 telephone line. This was grossly inadequateand called for an expansion and efficiency. More than half of the connected phone lines wereconcentrated in government offices and corporate organisations. Access in rural areas was muchlimited and non-existent in many parts of the country. The sector was characterized by weakinfrastructure base, huge unmet demand, limited investment, hardly completed calls and unreliablephone lines (Ndukwe, 2004). The Nigerian government thus found the need for a reform and thereforedecided to bring private firms into the sector through deregulation and liberalisation against themonopoly enjoyed by the Nigerian Telecommunications Ltd (NITEL)With the introduction, in 1992, of the Nigerian Communications Commission (NCC), which has therole of creating an enabling regulatory environment for efficient supply of telecommunications servicesand facilities, the industry began to witness the entry of private participants. The reform, which openedup the market to local and foreign private operators, injected competition into the telecom market. Thisstudy examines the effects of the competition on availability, quality and cost of telecommunicationsservices in Nigeria in 10 years of the reform.2. A Brief Review of Related Works 8
A large body of literature exists on performance-based analysis of telecommunications reforms acrossthe world. With few exceptions, most of the works tell stories of success. Using panel data set, many ofthem adopt multi-nation analysis and find a positive correlation between reforms and performance interms of increased penetration, improved efficiency and improved productivity of firms among othergains (Fink et al, 2002; Li & Lyons, 2008; Wallsten, 1999; Boylaud & Nicoletti, 2001). The story isnot different for case studies that are country or firm specific (Imai, 2002; Cui et al, 2009; Oniki et al,1994; Majumdar,1992). However, the degree of success varies across regions and countries, partlyowing to certain peculiarities.Fink et al (2002) use a panel data set for 86 developing countries across Africa, Asia, the Middle East,and Latin America and the Caribbean over the period 1985 to 1999 to analyze the effect of policyreform in basic telecommunications on sectoral performance. They find that privatization andcompetition lead to significant improvements in performance, which they agree is partly driven by fasttechnological progress in telecommunications. According to the study, a comprehensive reformprogram, involving both privatization and competition as well as support of an independent regulator,produced the largest gains (an 8 percent higher level of mainlines and a 21 percent higher level ofproductivity) compared to years of partial and no reform. The study further argues that the sequence ofreform matters, as mainline penetration is lower if competition is introduced after privatization, ratherthan at the same time.In another study, Wallsten (1999) examines the effects of privatization, competition, and regulation ontelecommunications performance in 30 African and Latin American countries from 1984 through 1997.Using fixed-effects regressions, the study finds that competition is correlated with increases in the percapita number of mainlines, payphones, and connection capacity, and with decreases in the price oflocal calls. Privatizing an incumbent, according to the study, is negatively correlated with mainlinepenetration and connection capacity. Privatization combined with an independent regulator, however,is positively correlated with connection capacity and substantially mitigates the negative effect onmainline penetration. This stresses the importance of regulation in reforms.Using panel data on 23 countries, Ros and Banerjee (2000) find a positive and statistically significantrelationship between privatization and network expansion and efficiency in the Latin American region.The findings are summarized as: one, privatization has a significant positive impact on both networkexpansion and technical efficiency; two, privatization altered incentives sufficiently to relieve thesupply bottlenecks from the days of public ownership and increased the supply of main lines; and three,low penetration rates in Latin America arose from service prices that are too low. The study concludesthat tariff rebalancing, privatization, and network technology upgrades all have the effect of reducingthe proportion of unmet demand for residential basic service in a country. According to the study, a 10percent increase in monthly subscription charges (relative to the average residential price in LatinAmerica) leads to a reduction in unmet demand of approximately 4.1 percent. And, most importantly,even after controlling for tariff rebalancing, privatization appears to reduce unmet demand byapproximately 28 percent.Li & Lyons (2008), in a closely related study, investigate the effect of competition, privatization andthe existence of an independent industry regulator on mobile network penetration in 30 national mobilemarkets, comprising 29 OECD countries and China, over the time period 1991-2006. The studyconfirms that competition is generally associated with improved telecom performances. However, theirfinding shows that privatization works best when it is integrated into a broader process of structuralreform. That is, when competition is introduced into the system with more than two firms. Inagreement with Wallsten (1999), the study also positively correlates independent industry regulatorwith mobile penetration; arguing that the role of an independent industry regulator is particularlycrucial in privatized mobile markets.Boylaud & Nicoletti (2001) investigate the effects of entry liberalisation and privatisation onproductivity, prices and quality of service in long-distance (domestic and international) and mobilecellular telephony services in 23 OECD countries over the 1991-1997 period. Their findings agree withthose of the above studies. The analysis shows that prospective competition (as proxied by the numberof years remaining to liberalisation) and effective competition (as proxied by the share of new entrantsor by the number of competitors) both bring about productivity and quality improvements and reducethe prices of all the telecommunications services considered in the analysis. 9
In Europe, Cave & Prosperetti (2001) rate telecommunications liberalization as a success. According tothem, between 1998 and 1999 alone, international call prices fell by an average of 40 percent; longdistance by 30 percent; and regional prices by 13 percent. Telecom operators in Europe rose to about460. Between 1998 and 2000 the total telecom services market grew by an estimated 12.6 percent, to161 billion euros. They however point out certain limitations of the liberalization. For instance,competition, according to them, has not led to the widespread deployment of alternative infrastructures,and this outcome has kept leased line prices at a very high level; which in turn, has hampered thegrowth of Internet penetration.Using a comprehensive country-level panel data set of 177 countries covering the period from 1990 to2001, Li and Xu (2004) investigate the impact of privatization and competition in thetelecommunications sector around the world. They find that Full privatization, which gave privateowners control rights, contributed substantially to improving the allocation of labor and capital,expanding service output and network penetration, and improving labor and total factor productivities.While partial privatization, which retained the state’s control rights, showed no significant impact. Thestudy also finds evidence of complementarity between privatization and competition in deepeningnetwork penetration and in restraining the rise of service pricing among privatized operators. The studythus argues that optimal policies require bundling competition policies with privatization.In a case study, Cui et al (2009), examine the relationship between reform and the performances ofChina telecommunications sector over the period 1975 – 2006, using a multiple linear regression. Thestudy finds that privatization and competition significantly improve the output, efficiency andinvestment. They however do not have significant impact on the employment in the sector.Assessing the gains from deregulation in Japans international telecommunications industry, Imai(2002) finds that deregulation brought about a 22.2% fall in Kokusai Denshin Denwas (KDD) unit costfor the eight-year period ending in 1992. And because this efficiency gain was fully passed along totelephone users in the form of lower rates, the corresponding increment of consumer surplus was ofsignificant size, equivalent to 25.6% of total international telephone call revenues in 1992. The findingis corroborated by Oniki et al (1994), which assesses the effects of liberalization on the productiveperformance of NTT in Japan. The study finds that during the 1958–87 period, NTTs Total FactorProductivity level increased at an average annual rate of 3.4%. However, TFP improved at asignificantly faster rate following adoption of policies of liberalization. The NTTs average annual TFPgrowth rate was 5.12% for the 1982–87 period as compared to a 0.26% per year growth rate for theprevious five year (1977–82) period. The decomposition of TFP growth, according to the study,appears to indicate that liberalization was a major source of productivity improvement for NTT.Majumdar (1992), in another case study, examines the impact of deregulation on the performance offirms in the US telecommunications services industry and suggests that deregulation has differingimpacts on different dimensions of firms’ performance. Among interesting questions the studyattempts to provide answers to are: one, has the performance of firms providing telecommunicationservices in the USA changed as a result of deregulation? and two, why are there differences in theperformance of firms in a regulated versus deregulated environment, particularly where the samecollection of employees who managed the old regulated firms are in charge in the new regime? Inanswering these questions, the study posits that deregulation enhances the competitive environment offirms, spurring them to become internally efficient and better their overall performance. It explainsfurther that because the environment of a firm establishes the context within which operations arecarried out and performance outcomes attained, performance changes after deregulation are broughtabout not because of a sudden change in the abilities of incumbent management, but because of thechanging constraints and opportunities faced in a more competitive environment.Profitability, according to the study, often rises in the early post-deregulation period for existing firmssince market opportunities are greater. But, as more firms enter the market, concentration within themarket is reduced and price-cost or profitability margins drop. Productivity increases because ofcompetitive pressures and, though incentives to innovate are higher, competition drives prices down tomarginal costs. The study concludes that the impact of deregulation has significantly affected theperformance of firms in the US telecommunications industry.Pyramid research (2010) examines the impacts of mobile services in Nigeria. It focuses on how mobiletechnologies are transforming economic and social activities in the country. Among its findings are: 10
mobile penetration of over 70 million, which is about 50% of the population; approximately $16bninvestment in mobile sub sector of the industry; declining prices for connection; increase inemployment creation; and spill-over effect of mobile services on other sectors of the Nigerianeconomy. The study concentrates only on the mobile sub sector of the industry. It equally fails toexamine the issue of quality of services provided and other associated problems, which constitute partof the focus of our new study on Nigeria.3. MethodologyThe study made use of data collected from the Nigerian Communications Commission’s (NCC)database. The data are complemented with those collected from field survey in which 1200 users oftelephone and Internet services were randomly questioned in Lagos, the commercial nerve centre of thecountry. The choice of Lagos is premised on the need to take samples from an area that accommodatesall operators in the industry. The area is sufficient in that the nature of telephone services acrossNigeria is same. In addition, a market survey of telephone accessories was made in four cities, namelyLagos, Port Harcourt, Kano and the Federal Capital Territory. The data are analysed using trendanalysis.4. The Nature and Extent of the Reform in NigeriaThe reform adopted by the government in the sector is substitution of competition for monopolyotherwise known as demonopolization or deregulation. With this, apart from offering 60% share ofNITEL and M-Tel to private individuals and organisations, private investors are licensed to operateside by side with NITEL. The reform thus involves three elements. These are privatisation,deregulation and liberalisation. NITEL and M-Tel is undergoing a process of partial privatisation inwhich government is retaining 40% of the stake while 60% is to be sold to private investors. Out ofthis, 40% is to go to core investors and 20% to the Nigerian public. It is however unfortunate that aftera decade, the process of privatising NITEL and M-Tel has not been successful partly due topoliticisation of the process. Deregulation is targeted at removing NITEL’s monopoly in the market topave way for competition, while the market is liberalised to allow foreign participation in the emergingcompetition. As at 2009, no fewer than 20 firms have been licensed to provide range of telephone andInternet services using GSM, CDMA, and Fixed Wired/Wireless technologies. Among other functions,a regulatory body, the Nigerian Telecommunications Commission (NCC), is established to license andregulate the activities of the operators towards achieving the reform objectives and prevent anti-competitive tendencies.5. The Performance of the Reform Policy5.1 Service AvailabilityThe study examines service availability by measuring the level of telephone penetration. Acombination of existing data and those obtained from fieldwork is used to obtain the level ofpenetration. Figure 5:1:1 shows the telephone subscribers growth in Nigeria from 1999 to 2010. Thefigure shows a persistent increase in telephone growth in the country. The growth is at increasing ratewith a slight fall in the rate (not actual) of growth in 2007. This indicates an unexhausted growthpotential of the market. It is a tremendous growth of subscription base in the country from 508,316 in1999 to 81,931,223 in 2010 representing over 16000% growth. Consequently, teledensity (telephonepenetration) rose from 0.45 in 1999 to 58.52 in 2010 as shown in fig. 5:1:2What this implies is that before the reform, telephone penetration was as low as 222 inhabitants to atelephone line but rose to less than 2 inhabitants to a telephone line in 2010. This data presupposesthat, at least, one out of every two inhabitants in Nigeria subscribes to a telephone line. This ishowever not the case. The field survey reveals that majority of subscribers, for one reason or the other,subscribe to two or more telephone lines. As shown in table 5:1:1, Only 33.9% of the users questionedsubscribe to a single network leaving not fewer than 66% subscribing to two or more telephone lines.The actual number of subscribers in Nigeria cannot be ascertained until the Nigerian CommunicationsCommission (NCC) completes the telephone subscribers’ registration. The above notwithstanding,telephone penetration in Nigeria is high and can be doubled in the nearest future considering theinstalled capacity, which is more than twice the presently active lines. (see table 5:1:2).While the role of competition, as infused by the reform policy, cannot be undermined, it is equallyimportant to admit the role of global technological revolution in telecommunications, whichtremendously aided the success of the reform policy. What is difficult is to state, in quantitative terms, 11
the level of contribution of each factor. Nonetheless, both the reform and technological innovation inworld’s telecommunications explain the rapid expansion of Nigeria’s telecom sector.The intensity of the competition rose with entry of Globacom, the 2nd National Carrier, in 2003 andthe tempo has since been sustained. The scramble by operators to gain more share of the market madethem roll out more lines with competing and innovative packages. It is arguable at this point thatcompetition is really at play. Buttressing this position is that by 2010, MTEL, the mobile arm ofNITEL that earlier enjoyed the monopoly, has a share of less than 1% of the mobile market (NCC,2010a). Over 99% is controlled by the private operators, who came in as a result of the reform. Asearlier said, what also aided the rapid growth of the Nigeria’s telecom market is technologicalbreakthrough in the world’s telecommunications, particularly the advent of GSM. The GSMtechnology is easier and faster in creation of telephone lines. This is why as at August 2010, GSM subsector in Nigeria with only 5 operators control 87.24% of the total telephone market, while CDMA andfixed wired/wireless with 16 operators control only 12.76% of the market (NCC, ibid)With respect to service availability in Nigeria, the reform policy has been a huge success. By the year2007, all the 36 states and the Federal Capital Territory have been covered by GSM-based mobileoperators and CDMA operators (Ndukwe, 2009) with increased range of services. Waiting time fortelephone installation and service delivery is tending towards zero. Service penetration, to a larger andgrowing number in underserved and unserved semi-urban and rural areas, is being witnessed.5.2 Quality of ServiceAs shown in table 5:2:1, not fewer than 10 different problems are identified by the telephone userswhile three principal problems are identified as associated with use of internet in Nigeria. The mostreported problems are network failure and network congestion, which are reported by more than half ofthe people sampled. With respect to the Internet, most users complained of slow download andconnection drops as the most frequently encountered problems.The above implies that much is still desired in terms of service quality in Nigeria. Factors affecting thequality of telephone and internet services in Nigeria have been identified to include poor power supply,security problem, limited transmission infrastructure and operators’ penchant for adding moresubscribers than their networks can accommodate. All these were identified by participants at the NCCpublic forum on quality of service. Poor power supply in Nigeria, for instance, is identified to beresponsible for at least 70% of the poor service quality (NCC, 2007). Theft of generating sets andvandalisation of infrastructure by restive youths are the security factors identified as partly affectingservice quality. In view of these problems, both government and operators have roles to play inensuring improved quality of telephone and Internet services in Nigeria.5.3 Cost of ServiceAs the provision of telephone and Internet services are being synchronised, that is, connection totelephone may also imply connection to the Internet today, this part of the study focuses on cost oftelephone services in Nigeria. Cost of telephone services has two components, namely, cost ofconnection and tariff. Between 2001 and 2010, cost of telephone connection in Nigeria witnessed adrastic fall, particularly the cost of Subscriber Identification Module (SIM) cards. The story of tariffsduring the period was however different. This section of the study attempts to provide explanations forthe contrasting observations.The intense competition in the world telecom market coupled with technological revolution,particularly Chinese production of low priced telecommunications accessories including handsets, hasreduced the cost of mobile phones by as much as 80% (market survey, 2010). With as low as threethousand Nigerian naira (N3000/$20), users are able to purchase a new handset in the Nigerian marketagainst the initial N15,000 and above in 2001.While the cost of SIM fell by about 99% (from N14,500 to N150) between 2001 and 2010 (Fig 5:3:1),tariff (off net) only reduced by 24% (Fig 5:3:2). The effect of competition was not much felt in themarket until the arrival of Globacom, the 2nd national carrier, in August 2003 with competitivepackages like per second billing. The period marked the beginning of intense competition in the mobilesub sector of the telecommunications market with each operators scrambling to capture maximumpossible share of the market. The year 2004 marked the beginning of fall of cost of SIM, which issustained till date. It is however a different story for tariffs, where competition has no serious effect till 12
date. The popular view of subscribers, as presented in Table 5:3:1, is that tariffs charged by operatorsare still high.About 52% of the users rate the tariffs either as much or too much, while 39% consider it moderate.The inability of competition to bring about a significant reduction in tariff as shown in fig 5:3:2 in aperiod of 10 years can be attributed to factors that included presence of dominance in the mobile sub-sector, poor power supply and security problem.Available statistics shows that MTN Nigeria has maintained a dominant share of the market since2001, even though the dominance is being challenged by other competitors (Table 5:3:2). The NCC ina study affirms that MTN controls a significant portion of key network infrastructure in Nigeria’smobile telecommunications sector (NCC, 2010b). Such facilities include towers and backbone networktransmission. It is also observed in the study that MTN appeared to be significantly larger than its twomain competitors (Zain [now Airtel] and Globacom) put together. About 89% of users sampledsubscribe to MTN out of which are over 23% that subscribe to only MTN, while 65% subscribe toMTN and other networks. This clearly supports the statistics provided by NCC.What is significant here is that any network that has dominance in the GSM market definitely extendsthe dominance to the entire telephone market as the GSM sub sector controls over 87% of the entiremarket (Table 5:3:3). The dominance of MTN, both in the market share and network infrastructure,gives it an advantage over other operators in two ways. One, being the first to cover many parts of thecountry, it provides the basic infrastructure that others coming later share and pay for. The situationgives MTN the advantage of sole determination of what others pay for use of the infrastructure,particularly in areas where MTN has the only viable infrastructure.Two, being the first to cover many parts of the country, most of earlier consumers subscribe to MTN.As a result of high interconnection rate, calls across networks (off net) attracts higher tariffs. Thissituation has forced new subscribers to either subscribe to MTN or add an MTN line to their choicenetwork. This further expands MTN network and makes more call to terminate on it than any othernetwork. This makes it the net beneficiary (receiver) of interconnection fee. The national policy ontelecommunication (2000) provides that payments for interconnection and access services betweenoperators should be based on the actual cost of such interconnection, NCC has however not been ableto enforce this simply because it is difficult to ascertain actual cost of interconnection andinfrastructure use. Until the question of dominance is addressed, competition will continue to behindered in the area of tariff and no serious reduction may be witnessed, particularly in off net calls.Equally, the need for the operators to provide for themselves alternative power supply most of the timeconstitutes an increase in service production cost. The operators in Nigeria’s telecom industry largelyor entirely depend on power generating set and fuel, which invariably is an extra cost on production.Conversely, stable power supply in the country will reduce cost of production and subsequently reducetariff.Lastly, vandalism and theft of installations of the operating firms across the country has added to thecost of operation, as they have to hire and pay for security services to protect the installations.Addressing these problems will, expectedly, bring about a substantial reduction in telccom servicestariffs.6. Other Attendant EffectsAs expected, it is not all about positive story of reform. Though not a focus of this study, it may benecessary to identify a few of other attendant effects of the reform. Prominent but unnoticed amongthese is the tendency towards foreign domination of the sector. This may be recalled as a fundamentalreason that brought about the indigenisation policy of the government in the 1970s as a move towardseconomic independence. What is rather being witnessed in the Nigerian telecom sector is a tendencytoward market imperialism with leading firms being foreign owned.Another effect of the reform is the loss of jobs recorded in the public owned NITEL, which isundergoing a privatisation process. However, the reform, according to NCC (2005), has created over5,500 direct and 450,000 indirect new jobs. Also, the rate of cyber crime has seriously increased partlyowing to expanded access to Internet facilities and high unemployment rate in the country. 13
7. ConclusionThe study examines the effects of the competition that was brought about by deregulation andliberalisation of the telecommunications sector on availability, quality and cost of telecommunicationsservices in Nigeria in 10 years of the reform. The result shows an unprecedented high telephonepenetration with teledensity increasing from 0.45 to 58.52 lines per 100 inhabitants. Also, an increasein the range of services was witnessed but with relatively poor quality. Other findings include a drasticfall in the cost of connection with cost of GSM SIM falling by as much as 99%, while tariffs only fellby 24% during the period.Aside the positive findings, there are other attendant problems such as loss of jobs in the NITEL,which is undergoing privatisation process, perceived foreign domination of the sector, increased rate ofcyber crime and health hazards created by various telecom firms’ installations among others.While the reform may be largely adjudged a success, there still exist desires for improvement,particularly in the areas of service quality and tariffs reduction. It is in view of this that improvementof electricity supply becomes expedient in order to improve service quality and reduce cost of services.The Nigerian Communications Commission (NCC) should address the issue of network infrastructuresharing, particularly in areas where there is a single provider. This will promote grater access to sharedinfrastructure, reduce dominance and subsequently reduce tariffs. This becomes necessary in view ofthe fact that every licensed operator cannot provide the infrastructure it requires.Implementation of number portability is of equal importance to strengthen consumers’ choice. Manyusers may intend to change their network but are constrained by their unwillingness to change thenumber with which they are known. When number portability, which allows subscribers to changenetwork and retain their numbers, is combined with provision of alternative network infrastructure,dominance in the market will be greatly reduced. With this, a level playground is ensured and faircompetition will bring down tariffs. Other requirements to improve the situation include a significantreduction of interconnection rate and regular review of market activities with a view to identifying andeliminating anti-competitive practices.What has been witnessed in ten years of telecommunications reform in Nigeria is an indication thatcompetition, rather than monopoly, is desirous in certain public service delivery. However, suchcompetition requires sufficient legislation and regulation to succeed. Otherwise, a tendency towardprivate monopoly may develop. The success story of telecommunications reform in Nigeria is partlydue to the regulatory competence of the NCC.ReferencesBoylaud, O. & Nicoletti, G. (2001), “Regulation, Market Structure and Performance inTelecommunications”, OECD Economic Studies 4(1), 99–142.Cave, M. & Prosperetti, L. (2001). “The Liberalization of European Telecommunications” in Cave,M. & Crandall, R.W. (eds), Telecommunications Liberalization on Two Sides of the Atlantic,Washington D.C.: AEI-Brookings Joint Center for Regulatory Studies, pp. 39-73.Cui, J., Lin, P. & Tang, S. (2009), “How do Privatization and Competition impact ChinaTelecommunications Performances?”, Proceedings of the Fifth International Conference onNetworking and Services, Valencia, pp. 165-168.Federal Government of Nigeria, (2000), The National Policy on Telecommunication, (Online at.http://www.ncc.gov.ng/TelecomsPolicy/ The National Policy on Telecommunication.pdf, accessed07/15/2011).Fink, C., Mattoo, A. & Rathindran, R. (2002), “An Assessment of Telecommunications Reform inDeveloping Countries”, Policy Research Working Paper 2909, The World Bank DevelopmentResearch Group.Idigo, E. N. (2003), Government Business Relations: A Comparative Nigerian Perspective, Lagos: X-Pose Communications & Publishing Co. Ltd. 14
Imai, H. (2002), Assessing the Gains from Deregulation in Japans International TelecommunicationsIndustry. Cambridge: John King Fairbank Center for East Asian Research.Li, W. & Xu, L. C. (2004), “The impact of privatization and competition in the telecommunicationssector around the world”, The Journal of Law and Economics 47(2), 1-36.Li, Y. & Lyons, B. (2010), “An Empirical Analysis of Market Structure, Privatization and IndependentRegulation on Mobile Network Penetration”, paper presented at the CRESSE Conference, Crete, 2nd –4th July, 2010.Majumdar, S. K. (1992), “Performance in the US telecommunication services industry: An analysis ofthe impact of deregulation”, Telecommunications Policy 16(4), 327-338.Ndukwe, E. (2003), “The Role of Telecommunications in National Development”, a speech presentedat the 19th Omoyale Annual Management Lecture on Friday December 5, .2003 at Chartered Instituteof Bankers Auditorium, Victoria Island, Lagos.Ndukwe, E. (2004), “An Overview of the Nigerian Telecommunications Environment, NigerianCommunications Commission”. (Online athttp://www.ncc.gov.ng/archive/speeches_presentations/EVCs Presentation/NCC CEO Presentation onOverview of Nigerian Telecoms Industry.pdf, accessed 10/18/2011)Ndukwe, E. (2009), “Telecommunications as a Vehicle for Socio-Economic Development”, (Online athttp://www.ncc.gov.ng/speeches_presenstatations/EVC’sPresentation/2009/socio.pdf, accessed07/17/2010).Nigerian Communications Commission, (2007), “Public Forum on Quality of Service”, (Online athttp://www.ncc.gov.ng/qos_comm_07.htm, accessed 07/17/2010).Nigerian Communications Commission. (2010a), “Industry Statistics”, (Online athttp://www.ncc.gov.ng/, accessed 12/05/2010).Nigerian Communications Commission. (2010b), “Determination on Dominance in SelectedCommunications Markets in Nigeria”, (Online at http://www.ncc.gov.ng/RegulatorFramework/Legal-NCC_Dominance_Determination.pdf, accessed 10/04/2011).Nigerian Communications Commission, (2005), Trends in Telecommunications Market in Nigeria,2003-2004, Abuja: NCC.Oniki, H., Oum, T. H., Stevenson, R. & Zhang, Y. (1994), “The Productivity Effects of theLiberalization of Japanese Telecommunication Policy”, Journal of Productivity Analysis. 5(1), 63-79.Pyramid Research (2010), The Impact of Mobile Services in Nigeria: How Mobile Technologies areTransforming Economic and Social Activities, Abuja: Pyramid ResearchRos, A. J. & Banerjee, A. (2000), “Telecommunications Privatization and Tariff Rebalancing:Evidence from Latin America”, Telecommunications Policy 24, 233-252.Wallsten, S. J. (2001), “An Econometric Analysis of Telecom Competition, Privatization, andRegulation in Africa and Latin America”, Journal of Industrial Economics 49(1), 1-19.Table 5:1:1 Distribution of respondents by networks subscribed to Network % of Subscribers to Total Subscribers Single network in %MTN 88.9 23.4GLOBACOM 51.3 6AIRTEL 39.3 3.7M-TEL - -ETISALAT 27.4 0.8 15
Total 33.9 (of 100%)Source: Field Survey, 2010Table 5:1:2 Installed capacity, active lines and connected lines as at August 2010 Lines Connected Active Installed Lines Lines CapacityGSM 95,718,928 74,074,793 134,025,308CDMA 11,706,269 6,616,457 75,415,597Fixed Wired/ 2,722,322 1,239,973 9,315,277WirelessTotal 110,147,519 81,931,223 218,756,182Source: NCC, 2010 16
Table 5:2:1 Complaints on Telephone and Internet UseS/N Complaints % of users Rating of Complaints (%)Telephone1 Network failure 60.8 15.712 Network congestions 50.4 13.013 Charging for undelivered SMS 43.6 11.264 Call drops 42.7 11.035 Over billing 42.7 11.036 Inability to connect other networks 35.0 9.047 Poor connections 34.2 8.848 Inability to recharge 33.3 8.609 Inability to check balance 28.2 7.2810 Disappearance of credit 16.2 4.18 TOTAL 100.00Internet1 Slow downloads 71.8 42.812. Connection failure/drops 54.7 32.623 Inability to connect 41.2 24.57 TOTAL 100.00Source: Field Survey, 2010Table 5:3:1 Description of tariffsRating % of usersToo Much 10.3Much 41.9Moderate 39.3Cheap 3.4No response 5.1Total 100Source: field Survey, 2010Table 5:3:2 Mobile Operators Market SharesOperator % shareMTN 46.12GLOBACOM 26.87Airtel 24.74EMTS (Etisalat) 1.76M-Tel 0.44Total 100Source: NCC, 2010Table 5:3:3 Share of ServicesTechnology % shareGSM 87.24CDMA 10.65Fixed 2.12TOTAL 100Source: NCC, 2010 17
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